Shah Deniz Awards $841 million Contracts for Shah Deniz Project

Source: www.gulfoilandgas.com 3/19/2014, Location: Asia

The Shah Deniz and South Caucasus Pipeline consortia are moving forward at pace with the awards of key contracts for the development of the Shah Deniz Stage 2 and South Caucasus Pipeline Expansion (SCPX) projects.

The contracts, covering both project management services and construction, follow the final investment decisions announced on 17 December 2013. The contract awards underpin the schedule for project delivery and complement the progress being made across multiple areas of this major development.

Since the beginning of 2014 a number of key Stage 2 contracts have been awarded following on from three major contracts, which were announced in December 2013:

·The $528 million contract for the construction and commissioning support of the SCPX project facilities in Georgia has been awarded to the Bechtel Enka joint venture which is comprised of Bechtel International Inc. and ENKA insaat ve Sanayi AS. The scope of work under this contract includes construction of a 16km access road, two 120 megawatt compressor stations and a pressure reduction and metering station. Completion is expected in 2018.

·The contract for pipeline and facilities engineering and project management services for the SCPX project has been awarded to Chicago Bridge & Iron UK Limited (CB&I). The value of this contract is $174 million and completion expected in 2018.

·The contract for the initial phase of the subsea and pipeline engineering and project management services, amounting to $57 million, has been awarded to Wood Group Kenny Limited (WGK).

·The contract for engineering, procurement and construction of the offshore platform living quarters has been awarded to Apply Emtunga. The $32 million contract should be completed in 2017. Assembly and commissioning of the living quarters will be carried out at the ATA fabrication yard in Bibi-Heybat near Baku where topsides units of the platforms will be constructed using local resources.

·The $26 million contract for horizontal directional drilling and line pipe installation for five river crossings of the SCPX project has been awarded to DrillTec GmbH. Completion is expected in 2016.

·The contract for shaft and tunnel construction and line pipe installation for the two river crossings of the SCPX project (one in Azerbaijan and one in Georgia) has been awarded to CSM Bessac. This $24 million contract is expected to complete in 2017.

“We are very pleased to announce these contracts”, said Gordon Birrell, Regional President for Azerbaijan, Georgia and Turkey of BP, the operator of the Shah Deniz project. “They underpin the tremendous progress that has been made since our final investment decision was taken in December. The timely award of the contracts, and the quality of the companies that will be working with us on Shah Deniz and SCP, give us confidence that these important projects can be delivered on time and on budget, allowing first gas in late 2018. Developments of this scale require close partnerships between multiple companies, and we look forward to working closely with all these companies over the next few years.”

These contract awards complement progress across the Southern Corridor projects. Offshore, the Istiglal drilling rig has completed drilling the latest well in the northern part of the field, meaning that five production wells have now been drilled. An upgrade and recertification programme has been successfully completed on the Heydar Aliyev rig, which has now returned to drilling activities in the western part of the field. These two rigs will remain working on the Shah Deniz field to deliver all the wells required to ramp production up to the planned plateau level of 16 billion cubic metres per year.

Additionally, the first consignments of steel for fabrication of the platform jackets arrived in Baku in December 2013, and on 22 February 2014 the first steel for fabrication of the platform decks arrived at the ATA fabrication yard in Bibi-Heybat near Baku. The $974 million contract for fabrication, load out and offshore hook-up and commissioning of the topsides units of the two Stage 2 platforms is being undertaken by the AMEC-Tekfen-Azfen (ATA) consortium which is comprised of AMEC MMC, Tekfen Insaat ve Tesisat A.S. and Azfen joint venture.